Yazılar

US Investors Shift Focus from Chipmakers to Software Amid AI Investment Evolution

/in /tarafından

As the AI investment boom slows, U.S. chip stocks, which were the biggest beneficiaries of last year’s surge, are struggling in 2025. The spotlight has shifted to software companies, which are now seen as the next big play in AI. This shift comes as volatility driven by tariffs and concerns about diminishing demand, coupled with the rise of lower-cost AI models from China’s DeepSeek, have weighed on semiconductor shares.

The shift towards software is being viewed by several analysts as a long-term evolution of the AI investment landscape. According to David Russell, global head of market strategy at TradeStation, there’s been a noticeable “rotation” in investor focus, especially in light of the developments surrounding DeepSeek, the semiconductor outperformance of 2024, and the ongoing restrictions on U.S. chip exports to China. “Investors are looking for the next three-to-five-year stories… those companies that will benefit from what Nvidia has already done,” he added.

So far in 2025, the Philadelphia SE Semiconductor index has fallen 5.6%, with Nvidia, a major player in the industry, down nearly 13%. In contrast, several software companies have seen significant gains, with stocks like Atlassian, CrowdStrike Holdings, Palantir Technologies, and Cognizant rising between 7% and 19%. Exchange-traded funds (ETFs) tracking software companies have also seen substantial inflows. For example, the iShares Expanded Tech-Software Sector ETF has attracted over $1.87 billion in 2025, already surpassing last year’s total inflows.

Analysts argue that this shift is a natural progression for AI investments, as the primary use cases for AI technology are in software. Adam Turnquist, chief technical strategist at LPL Financial, emphasized that LPL prefers software stocks over semiconductors, a sentiment shared by Morgan Stanley. “The second stage of the innovation cycle is when people start utilizing products, and that’s when the software companies start getting paid… we’re now starting to see the ascendancy of the software part of the equation,” said Keith Weiss, equity analyst at Morgan Stanley.

This trend is driven by concerns about how long chip stocks can sustain their growth rates, with some investors rethinking the value of these stocks as software companies continue to improve their market position. The rise of DeepSeek’s more affordable chatbot, which competes with expensive direct-to-consumer AI products, is one factor contributing to a more cautious outlook on semiconductors. According to Brian Mulberry, portfolio manager at Zacks Investment Management, competition will likely reduce profits for these products, while enterprise software companies may find it easier to monetize new AI technology.

The shift toward software stocks is also influenced by the ongoing Sino-U.S. trade tensions, which have hurt semiconductor companies. Analysts have named companies such as Palantir, Microsoft, Oracle, and Salesforce as key players in the software space, though their performance has been mixed in 2025. Palantir, which offers AI software to businesses, has seen its stock rally, while Microsoft and Salesforce have struggled, down 4.9% and 12.6%, respectively.

Despite these fluctuations, some investors remain optimistic about the long-term prospects for software companies. While valuations for software giants like Microsoft and Oracle are still considered high—trading at 27 and 23 times forward earnings, respectively—investors like Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, argue that the focus should be on AI applications, not just chips. “We don’t need more Nvidia chips, we need applications,” she said.

Chinese AI Firm iFlyTek Plans European Expansion Amid Rising US-China Trade Tensions

/in /tarafından

Chinese artificial intelligence company iFlyTek is eyeing expansion in Europe as tensions between the United States and China escalate. Vice President Vincent Zhan revealed the company’s strategy at the Mobile World Congress in Barcelona, acknowledging the impact of the ongoing U.S.-China trade war on its business.

Zhan pointed out that North America, the company’s largest market outside of China, has faced challenges due to the rising trade barriers. In light of new tariffs imposed by U.S. President Donald Trump, iFlyTek is seeking to diversify its supply chain and reduce dependency on the North American market.

The latest tariffs introduced by Trump target several Chinese electronics categories, including smartphones, laptops, and smart devices. Additionally, Biden’s administration had previously imposed tariffs on Chinese computer chips, further complicating the situation for Chinese tech firms.

Despite these challenges, iFlyTek is making significant strides in Europe, where it currently operates in France and Hungary. The company plans to expand its presence, with Zhan mentioning that a new office in Paris is expected either this year or next. The firm also aims to broaden its footprint in Europe, with potential plans to enter Spain and Italy in the coming year.

At the Mobile World Congress, iFlyTek launched a new tablet featuring advanced transcription capabilities, underscoring the importance of the European market for the company. Zhan also hinted at further European expansion, selecting new countries based on partnerships already established.

The company, which has a market capitalization of 123 billion Chinese yuan ($16.97 billion), faced significant hurdles in 2019 when it was added to a U.S. trade blacklist. This designation has restricted iFlyTek from purchasing essential components, such as Nvidia’s AI chips, from American suppliers without U.S. government approval. In response, iFlyTek has turned to alternative sources, including Huawei chips and AI models from rising star DeepSeek.

While the trade challenges persist, Zhan expressed confidence in the company’s ability to navigate the situation. He highlighted that many Chinese companies are now manufacturing their own AI chips, a development that has helped mitigate some of the impact from U.S. trade policies.

Alibaba’s AI Reasoning Model Drives Shares Higher

/in /tarafından

Alibaba Group’s Hong Kong-listed shares surged by more than 8% on Thursday following the release of its new artificial intelligence (AI) reasoning model, QwQ-32B. The company claims that the model, with 32 billion parameters, delivers performance comparable to global AI hits like DeepSeek’s R1, which has 671 billion parameters.

The announcement was made through Alibaba’s AI unit on X, the platform formerly known as Twitter, where the company highlighted the QwQ-32B’s abilities in areas such as mathematical reasoning, coding, and general problem-solving. The model was put to the test in benchmark evaluations, performing on par with top AI models like OpenAI’s o1 mini and DeepSeek’s R1.

Alibaba’s new model is accessible via its chatbot service, Qwen Chat, where users can choose from a variety of Qwen models, including the powerful Qwen2.5-Max. The launch comes at a time when the Chinese government is increasing its support for industries, including artificial intelligence, humanoid robots, and 6G telecom.

DeepSeek, which has emerged as a key player in China’s AI landscape, continues to compete with global AI giants like OpenAI, offering models that rival the performance of more expensive alternatives with fewer computing resources.

In addition to Alibaba’s advancements, another AI release attracting attention was the introduction of Manus, an AI agent developed by the Chinese startup Monica. Manus, which outperformed OpenAI’s Deep Research in benchmarks for AI assistants, can help users with tasks such as travel planning and insurance comparisons. Currently by invitation only, a video showcasing Manus has gained significant interest, with over 280,000 views as of Thursday.